Tortoise SVN: Conflicts

Hi,

  I have two questions:

1.  I am testing the software for my project and had my collegue change a file with one or two  changes and I did made two other changes (not the same lines/words).  When I went to commit, I received an out of date update error, that I expected.  So then I updated my local copy and it said that one or more files is in a conflicted state.  I thought that if the same exact line or data was not changed, then it should merge the data into one document.  Do you know why this would be happening? 

2.  In trying to view differences in applications other than Microsoft Work, such as Excel and Powerpoint, I received an error message.  Are these types of files not supported by TortoiseSVN?

Please email me directly if possible. Thanks so much for your help!